US Global Investors recently published a piece on “Why High Oil Prices Are Here To Stay” (certainly worth a read) with a very useful chart on oil’s seasonal tendencies. As regular readers are aware, I’ve been discussing the bullish seasonal trend in oil and gasoline prices for the entirety of the last 50% move in gas prices. The following chart puts that seasonal trend in perspective.
If we stay true to the trend we can expect oil and gas prices to remain buoyant into the July 4th holiday when the driving season officially ends. That is the point when risk in the oil markets becomes elevated – particularly given the recent surge in prices. If the 25 year trends holds true then prices could remain high into the late summer period and the hurricane season when storms can disrupt supplies. Either way, we’re nearing a point where the risk/reward in oil prices is deteriorating.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.